The company has presented plans to address these impacts to ensure that the proposed project will, upon implementation of the specific agreed measures, comply with the environmental and social requirements - the Argentinean laws and regulations and the World Bank/IFC environment and social policies and the environmental, health and safety guidelines. The information about how these potential impacts will be addressed by the company is summarized in the paragraphs that follow. Further information is provided in the attached documentation.
- PAE has an established Health, Safety and Environment (“HSE”) Policy which states that the Company will conduct its business with respect and care for people and the environment in each of its operations. The HSE Policy declares that safety on the job, personnel health and preservation of the environment are its primary objectives. The company strongly believes that the continuous pursuit of excellence in safety, health and environment will contribute to the success of its corporate goals. Accordingly, the Policy commits PAE to go beyond compliance with legal regulatory requirements in the areas of health, safety and environment. The Policy is well integrated into the operational and performance measurement systems of the Company, with annual targets forming part of the key performance indicators in each business unit, which are then tied to remuneration.
- PAE obtained ISO 14001 certification for all of its business units (Golfo San Jorge, Tierra del Fuego, Acambuco and the Lindero Atravesado field in Neuquen) in 2001. The Tierra del Fuego, Neuquen and Acambuco units were re-certified in 2004 and the Golfo San Jorge unit is scheduled for re-certification later this year. Certification is verified by TUV Rheinland Group, which was the one originally providing PAE with the certification. PAE believes it complies with the regulations established by the Government of Argentina for the oil and gas sector at both the national and the provincial level. In addition, PAE complies with the requirements and protocols enforced by BP, including the reporting of GHG, HSE tri-annual auditing, review of HSE projects and review of specific projects or specific operations issues. As part of PAE’s corporate commitment to HSE, the managers of all business units as well as the CEO meet on a regular basis to discuss HSE issues, lessons learned, procedures and practices, as well as to conduct risks analysis of their activities, and review of the standards applied to their activities.
- PAE’s targets in the HSE area include “zero accidents” and “zero professional illnesses”. During 2004 the Company had 11 “days away from work cases”, which included both own employees as well as contractors. PAE’s target for 2005 is to at least reduce this type of accidents by half, or eliminate them completely. To achieve this, the company is implementing training programs focused on the following:
- safety at the work place – Stop Unsafe Activities program –
- drivers safety;
- first aid; and
- management of HSE issues.
In addition, Advanced Safety Audits are conducted by PAEs personnel in an effort to improve safety in their daily activities.
- During 2004 the company had Greenhouse Gas Emissions (GHG) of 2.5 million tonnes. As part of its corporate commitment to transparency, PAE informs to BP its share of GHG on a quarterly basis. PAE does not have any venting, other than sporadic authorized venting or exempt venting, such as gas vented that is burned in safety torches in the gas plants and it complies with World Bank Group emission limits for onshore operations.
- PAE’s equipment at all business units is adequately labeled, has secondary containments, and entry to these areas is restricted to authorized personnel. The storm run-off systems are in place for areas requiring. Produced water is never discharged to surface water, after treatment it is always reinjected.
- PAE’s Golfo San Jorge activities include the exploration and production of gas and petroleum in the blocks of Cerro Dragon, Koluel Kaike and Piedra Clavada located primarily in the provinces of Chubut and Santa Cruz. The concession acreage for the Cerro Dragon block includes an area known as a “Petrified Forest”, which is of archaeological, cultural and scientific interest. The forest has a core area of 20 hectares, in which PAE does not have any oil and gas activities. The forest was created after the concession of PAE had been granted. Nevertherless, PAE in accordance with its HSE policy and its commitment to the protection of the environment, has not performed activities in the core area. However, PAE does have some limited activities in this area but outside the core area, including maintenance of existing well’s, and some limited production. If PAE in the future decides to drill more producing wells in this area, PAE will take the appropriate mitigation measures to minimize the impact of the forest.
- The Cerro Dragon area covers 3477 square kilometers. Currently, PAE’s operations in the Golfo San Jorge Are involve approximately 4361 contractors and 414 employees of PAE. The Cerro Dragon block has 55 active stations or batteries to collect the net production. The production of each of the wells is sent to the collector tanks and fluids are sent to the separator. Once the gas-petroleum is separated, the fluids are sent to tanks and then pumped to treatment plants for the separation of formation water. The Cerro Dragon block has two oil treatment plants and four plants for associated water separation, each with their respective injection plants. There are also eighteen pumping and injection plants for produced water. Production water is sent to the API settling pools where it is separated from the remnant petroleum; then the separated production water is sent to either tanks or pools (impermeable), to later be sent to the water injection plant. The pools are with adequate protection to avoid the trapping of birds and other animals. 100% of the produced water is injected as part of a secondary recovery. The crude is treated and stored in tanks and then transported to the measurement unit through a petroleum pipeline to Caleta Cordova.
- In the fields of Koluel Kaike and Piedra Clavada, there are 15 operational batteries or stations, 8 in Koluel Kaike and 7 in Piedra Clavada. These blocks are located in the province of Santa Cruz. The blocks have two crude and water separation treatment plants, five injection plants for treated water and associated equipment. The crude is treated and store in tanks and then transported to the measurement unit through an oil pipeline to Caleta Oliva.
- The Cerro Dragon, Piedra Clavada, and Koluel Kaike blocks have 3104oil and gas producing and injector wells. The Cerro Dragon development program includes:
- drilling 99 new oil producing wells;
- 36 well workovers; and
- complete 6 waterfloods that were commenced in 2003, commence injection in 4 waterfloods projects, and commence 5 new waterfloods.
The Piedra Clavada and Koluel Kaike development program includes:
- drilling 15 new wells;
- 10 workovers; and
- 10 conversions of producing well injectors.
In addition, on the gas side the company envisions:
- drilling 45 wells, and
- the construction of facilities, compressors and tie-in and hook-ups.
- PAE has a system for hiring of contractors. The system includes a program of ranking and matching according to PAE’s criteria based on HSE performance and management systems, technical capabilities and values. Once selected, contractors are trained in all relevant PAE’s standards. Contractors are bound to the same commitments on HSE and social relations as PAE’s own staff.
- PAE’s planned activities in the Acambuco block, in the Province of Salta (“the Province”), include the development of the Macueta gas field, the integration of the Macueta facilities with those of the already operating San Pedrito field, and the connection of the Macueta field with the Piquirenda processing plant through a 14” diameter gas pipeline of approximately 60 kilometers. PAE has performed an Environmental and Social Impact Assessment (“ESIA”) for each the Macueta 1001 well (first appraisal well) and the pipeline. A portion (13 km) of the pipeline crosses the Acambuco Nature Reserve. The part of the reserve that is traversed by the pipeline is heavily intervened by ranchers for crops and cattle raising. As part of the preparation for the above activities, PAE has held meetings with a number of Non-Governmental Organizations (“NGOs”), the Province authorities, and the communities in the reserve. The NGOs informally requested the Province to re-categorize the reserve as a “Multiple Use Reserve” according to Law 7107 (“Protected Areas Law”). Under the new category, the provincial authorities will prepare a “Management Plan”, which will eventually define various “zones”, detail the allowed activities and applicable restrictions in each zone, and identify a core zone. Currently, PAE as well as the NGOs are awaiting the decision of the government regarding the re-categorization of the reserve and a Public Hearing that is to be performed prior to construction approval. If during meetings significant changes on the routing of the pipeline occur, PAE will revise their documentation and an amended section to this ERS will be made. Four years ago, PAE established a fiduciary fund (the “Fund”) under art. 40 of the Protected Areas Law. The secretaria de Medio Ambiente of the Province is the “trustee” of the Fund, and the beneficiary is the Acambuco Reserve. A consulting committee formed by NGOs and PAE has also been set up to advise the Province. The funds for this trust have been provided by PAE. In addition, and in collaboration with Pro-Yungas, a local NGO, PAE is preparing a characterization of the fauna and flora of the reserve, which will be used as baseline for future EIAs.
- PAE’s current and planned activities in the Austral Basin include operations in the San Sebastian Bay in Tierra del Fuego. The San Sebastian Bay was declared a Ramsar Site on September 13, 1995 and at the local level it was declared “Reserva Costera Provincial” by the province. PAE’s activities in this area include, operation of production wells (oil and gas), and an oil pipeline (PAE has installed a new pipeline to decommission the existing one), drilling of new wells, and operation of loading facilities. All of PAE’s operated activities are onshore. In addition, it has a working interest in the offshore installations operated by Total. In accordance with national and provincial legislation, PAE notifies in advance the “Secretaria de Recursos Naturales” whenever it proposes to develop a project. An EIA is then prepared and a public consultation is performed depending of the kind of project and as requested by the “Secretaria de Recursos Naturales”. The determination of the impact is done by the environmental authorities. PAE follows the standards established by the Government of Argentina in this area and also works closely with NGOs and other institutions to preserve the Bay. In addition, PAE is collaborating with several organizations on the development of the master plan for the Bay. PAE monitors continuously all of its production activities in order to avoid any accidents or spills.
- PAE supports a range of social development activities including health care, job training, income generation, education, technical agricultural assistance, as well as innovative initiatives such as the Small and Medium Enterprise or PYMES effort with contractors in the Golfo San Jorge area. These programs grew out of consultation with a range of local leaders, NGOs, and communities from the area. PAE’s social staff provide assistance to local groups in identifying appropriate social investment programs. PAE has provided a summary of its social development and conservation initiatives entitled “Desarrollo Social y de Las Comunidades donde opera PAE”. This summary details the types of projects supported, the communities benefited, the value of the programs over time, and the roles of other organizations participating.
- PAE has been working throughout Argentina for many years and has developed a strong positive relationship with the communities in its areas of operation. In many cases, PAE staff are members of the community and live in it. PAE employs local staff based permanently in the field to perform social liaison and human resource functions and deal with both community development issues and informational requests. The Company has a process of open communications with communities, employees and contractors. It uses external survey methods to elicit feedback and assess the level of satisfaction with PAE locally. An information request and grievance process exists for each area of operation and is handled by an operations manager seconded to public relations or human resources. The company complies with Argentine legislation on consultation. As necessary, PAE also develops public consultation plans to complement required public hearings. At the corporate level, the company also maintains a web site with a range of relevant information that is updated annually.
- PAE has developed procedures to deal with land use and acquisition in compliance with Argentinean law. It aims to completely avoid physical relocation and to reach mutually-agreeable compensations for use based on willing-buyer willing-seller negotiations. There are no known cases of involuntary physical resettlement associated with PAE projects. All past compensation have been provided based on fair market rates. For pipeline routing, PAE has, a policy of siting to avoid social impacts and economic displacement. Impacts on land users (whether owners or not), for crops, fencing, and pasture land are slight. Compensation, if required, is based on replacement value. When possible, owners are allowed to continue to use the land for grazing or annual crop plantings, as the case may be. More information is provided in PAE’s protocol and practices in this regard. In any future cases that might result in economic or physical displacement, PAE will produce a Resettlement Action Plan or a Compensation Action Plan, as the case may require, in accordance with World Bank and IFC’s Policy (“Environmental and Social Policies”) as defined in the Loan Documentation.
- Potential temporary impacts were identified in the EIA for the Acambuco pipeline for the small community of Piquirenda. This community of mixed Guarani and non-Indian residents, many of whom migrated to this area over the past 40 years or more years, has been receiving community development assistance for several years as part of PAE’s good neighbor policy. Individual assistance programs are identified through discussions with community leaders and include improvement in nutrition for schoolchildren, health care, and school equipment and infrastructure. PAE’s development efforts have been very well received by this community. For any future projects impacting indigenous people, PAE is committed to develop an Indigenous Peoples Development Plan in accordance with World Bank and IFC’s policy (“Environmental and Social Policies”) as defined in the Loan Documentation.
